With China aggressively ramping up its tax policy by offering a high refund rate of 13% for tax-free shopping in a bid to lure tourist expenditure through more convenient spending, Thai tourism operators warned that the country could lose competitiveness if it reacts too slowly.
Adith Chairattananon, honorary secretary-general of the Association of Thai Travel Agents (Atta), said Thailand should also adopt a similar scheme as the instant on the spot tax refunds would encourage tourists to spend more during their trips, which could eventually raise spending per head.
He said since the beginning of this year, China has implemented a more active tourism policy, targeting both local and foreign tourists.
In addition to the revised tax refund rate, the Chinese government also allows citizens from 54 countries to stay for up to 240 hours (10 days) via a visa-free transit policy, which has greatly helped to attract a larger number of tourists.
Japan, which currently leads as the most-visited destination in Asia among Chinese nationals, also adopted tax-free shopping, though the Japanese government is now preparing to revert this scheme to a refund-based system next year.
According to Global Blue, a tourism shopping tax refund company, tax-free spending in Japan surged by 219% in March this year compared to the corresponding period in 2019, mainly driven by Chinese visitors, who accounted for 50% of the total.
Thapanee Kiatphaibool, governor of the Tourism Authority of Thailand, said tax-free shopping has been included in the country's ease of travelling policies that have been under discussion since 2024.
The agency has already learned that China is also using this policy to increase spending, while the Thai government, led by the Finance Ministry, is now studying the scheme.
As China has become an emerging competitor for all countries, not only Thailand, all related authorities should cooperate and help overcome the obstacles together, she said.
Mr Adith added that though the government in the future can successfully push entertainment complexes containing a legal casino, these new attractions won’t help boost the Chinese market, based on the situation seen in Vietnam, which also has casinos but drew a limited number of tourists to them.
Instead, Vietnam was able to grow its tourism based on other strong fundamental developments, particularly infrastructure across the country.
